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Maldonado v. First Liberty Ins. Corp., 546 F. Supp. 2d 1347 (S.D. Fla. 2008), arose from an auto accident in which the insured’s wife collided with the father of three small children, causing his death As soon as it became aware of the accident, the insurer notified the insured that “the nature and extent of the damages and injuries being claimed suggests there is a potential exposure in excess of your policy limits. . . .” Shortly after the accident, the attorney for the decedent’s estate demanded the $25,000 policy limit along with an affidavit setting forth the insureds’ assets. Over the next several months, the insurer attempted to tender the policy limits and to cause the insureds to complete the affidavit to the satisfaction of plaintiffs’ counsel.

Nevertheless, the insured and his wife refused to complete the required affidavit, claiming it was “very invasive in their request of extremely personal information,” such as Social Security and bank account numbers. On July 13, 2004, the estate withdrew its offer to settle for policy limits, citing the insured’s failure to complete the affidavit. The estate then filed suit against the insured and his wife. A consent judgment was entered for $3 million, of which the insurer paid $25,000. After the insured and his wife filed bankruptcy, the estate sued the insurer for bad faith.

On cross-motions for summary judgment, the Court considered whether the insurer had acted in disregard of its insured’s interests. The court entered summary judgment for the insurer, holding that “no reasonable jury could find that [the insurer] acted in its own best interest and in disregard for the [insured] in this case.” In its decision, the court noted what the insurer had done right:

[The insurer] constantly and timely communicated with both the estate and the [insured], repeatedly warned the [insured] of the risks of an excess judgment, advised the [insured] to execute the sample affidavit, and told them of what might happen if they failed to sign the affidavit. Finally, [the insurer] repeatedly advised the [insured] that they might want to retain private counsel. There is no evidence that [the insurer’s] conduct toward the [insured] lacked candor in any way. There is also no evidence that [the insurer] failed to apprise the estate of the problems its insured had with the revised affidavit.